Galilee Solicitors Pty Ltd v Ethan Group Pty Ltd

Nature of the proceedings

1. The proceedings were commenced on 7 August 2020.
2. Galilee Solicitors Pty Limited, an incorporated legal practice, is the plaintiff and cross-defendant (Galilee).
3. Ethan Group Pty Limited, a provider of information technology services, is the defendant and cross-claimant (Ethan).
4. The proceedings concern a dispute about fees payable by Galilee to Ethan for information technology services provided by Ethan to Galilee under a contract comprising a document entitled "Business Services Agreement - General Terms" dated 6 October 2016, including Service Schedules entitled "Schedule 5 - Managed Services" and "Schedule 2A - Hosted IP Voice", and various Service Order Forms (or SOFs), the most recent of which was signed by the parties on 24 May 2017 (together, the Contract).
5. Galilee alleges that it was induced to enter into the Contract by misleading or deceptive conduct or unconscionable conduct on the part of Ethan. Galilee claims: 1. damages for alleged misleading or deceptive conduct; 2. an order pursuant to s 243(a)(i) or s 243(c) of the Australian Consumer Law declaring certain clauses of the contract to be void or refusing to enforce those clauses, or alternatively a declaration that those clauses are unenforceable as a penalty or a declaration that Ethan is estopped from seeking payment of fees under those clauses; and 3. an order pursuant to s 243(d) of the Australian Consumer Law directing Ethan to refund certain fees to Galilee, or alternatively an order for repayment of those fees to Galilee as money had and received on the basis that Galilee paid those fees under a mistake.
6. The final relief sought by Galilee also includes: 1. an injunction restraining Ethan from taking any step to seek to enforce the payment of certain invoices issued by Ethan on the grounds that Ethan's conduct in issuing the invoices is unconscionable; and 2. an injunction restraining Ethan from terminating or suspending the provision of information technology services to Galilee on the basis of non-payment or late payment of the invoices referred to above.
7. Ethan denies the allegations of misleading or deceptive conduct and unconscionable conduct, denies that the clauses of the contract referred to above are a penalty, denies that the disputed payments were made by Galilee under mistake and denies that Galilee is entitled to the relief sought. Ethan has cross-claimed for judgment in the sum of fees totalling $505,204 allegedly owing by Galilee under the contract as at 11 September 2020, plus additional fees said to have been incurred by Galilee under the contract after that date, together with interest.

Interim orders

1. On 20 August 2020, the Court made the following order by consent and without admissions (emphasis added): "… the defendant be restrained from suspending, terminating or otherwise intentionally ceasing to provide all managed services which the defendant is contractually obliged to provide to the plaintiff as at the date of this order (Services), pending further order."
2. The parties' submissions referred to this as the Order, and I will adopt the same convention.
3. The Order was made on the plaintiff giving the usual undertaking as to damages and: "… subject always to the plaintiff paying the defendant: a. the sum of $63,789.23 plus GST as a monthly recurring service fee for the Services on or before the 15th day of each calendar month; and b. any session initiation protocol charges plus GST for telephone calls as itemised in any monthly invoice which the defendant issues to the plaintiff, such invoice to be paid on or before the 15th day of the calendar month that comes immediately after the month in which the invoice was issued, with the effect that the injunction in order 1 is automatically discharged if the plaintiff fails to make a payment as required under either subparagraphs (a) or (b) while order 1 remains in force."
4. Ethan does not dispute that Galilee has paid those monthly recurring service fees and session initiation protocol charges during the period that the Order has been in force.
5. The Court made the following notations in relation to the Order: "The Court notes that injunction in order 1: 8. is without prejudice to the defendant's rights to claim from the plaintiff any amounts for the Services to which it is entitled and which are in excess of the Monthly Payment; and 9. does not oblige the defendant to supply any goods or services to the plaintiff which are outside the scope of the Services."

The alleged contempt

1. By amended notice of motion filed on 3 March 2021 and amended statement of charge, Galilee seeks an order that Ethan be found guilty of, and punished for, contempt of court for allegedly breaching the Order on or about 7 December 2020 by ceasing to provide and maintain anti-virus software to protect Galilee's end-user devices against viruses and malware threats. [1]
2. It is necessary to refer to the particulars of the charge, as set out in the Amended Statement of Charge, in more detail.
3. Galilee alleges that the managed services that Ethan was contractually obliged to provide to it included the provision and maintenance of anti-virus software to protect Galilee's end-user devices against viruses and malware threats. [2] There was no dispute that Ethan agreed to provide those anti-virus services on the terms of the Contract.
4. Galilee alleges that Ethan provided that managed service by installing Symantec Endpoint Protection Cloud software (SEP) on all of Galilee's end-user devices in February 2017, and maintaining SEP on all of those devices until about 7 December 2020. [3] Again, there was no dispute about this.
5. Galilee alleges that, on 7 December 2020, the SEP licences procured and provided by Ethan to Galilee expired, reached their "end-of-life" date and/or ceased being updated so as to extend to new viruses. Galilee alleges that, by reason of those events, Ethan ceased providing to Galilee on 7 December 2020 all managed services that it was contractually obliged to provide to Galilee as referred to in the Order. It is alleged that this was a breach of the Order, and that the breach was intentional, [4] because (emphasis added): [5] "[Ethan] failed to take adequate and continuing steps that were reasonably open to [Ethan] to ensure that, in the event that the extent of the AV Protection to [Galilee's] Devices (including licences such as the Symantec SEP software licences) would be reduced by the expiration of any software licence pertaining to the AV Protection or by the cessation of updating so as to include new viruses within the scope of their coverage, replacement anti-virus protection would be procured and provided to [Galilee] or [Galilee] warned of the impending expiry and/or cessation."
6. The Amended Statement of Charge provides the following particulars of the "adequate and continuing steps that were reasonably open to [Ethan]" and that Ethan allegedly failed to take: [6] "[Ethan] failed to take adequate and continuing steps to ensure that any notification from licensors, such as Symantec (the licensor of the SEP software licences), whether by email or otherwise, as to termination of, or substantial reduction in the anti-virus coverage by, such licences would come to the attention of senior officers or employees within the defendant who could take appropriate steps, in the event of such termination or reduction, to ensure that the AV Protection to the plaintiff was not undermined as it in fact was."
7. The Amended Statement of Charge particularises the following notices that Galilee alleges were in fact received by officers or employees of Ethan in the period prior to 7 December 2020: 1. on or about 26 February 2020, Ethan received notification from Symantec (the vendor and licensor of SEP, and a division of Broadcom Inc) that SEP Cloud and SEP SBE services would no longer be available from 2 November 2020, and that devices would not be protected from that date except to the extent that they were transitioned to protection provided by a new platform, Symantec Endpoint Security (SES); 2. on or about 12 March 2020, Ethan's Cloud Services Portfolio Manager received notification from Symantec or Broadcom relating to questions concerning the transition to SES and a webinar to be conducted about SES on 7 April 2020; 3. on or about 27 May 2020, Ethan received notification from Broadcom that SEP would terminate on 2 November 2020; 4. on or about 30 May 2020, Ethan received notification from Symantec or Broadcom referring to "transitioning your [SEP Cloud] or [SEP SBE] offering to [SES]" and stating: 1. "You will need to perform the transition yourself"; 2. "After 13 NOV 2020, you will need to purchase a subscription of [SES] through your preferred partner. If your current product subscription expires after 13 NOV 2020, your [SES] subscription will be valid until your subscription end date. At that point, you will need to purchase a subscription from your preferred partner."; 1. on or about 24 September 2020, Ethan received notification from Westcon (a partner or distributor of Broadcom) to the effect that the "SEPC solution" would reach "end of life" by 2 November 2020; 2. on or about 23 October 2020, Ethan received at least three notifications to the effect that Broadcom had announced the end of life for SEP Cloud with effect from 2 November 2020, on which date the solution would be "fully discontinued, with the product no longer protecting endpoints, and access to the Symantec console no longer being available from this date" and stating that "we want to give our partners notice that this might be time to look at migrating your existing Symantec customers to another solution"; 3. on or about 24 October 2020 and again on 31 October 2020, Ethan received notification from Symantec or Broadcom specifying the steps that should be followed to successful activation of SES; 4. on or about 3 November 2020, Ethan received notification from Westcon that the end of life date for SEP was extended to November 2020; and 5. on or about 14 and 19 November 2020, Ethan received notification from Westcon that the end of life date for SEP was now 7 December 2020.
8. However, Galilee does not allege that any officer of employee of Ethan had actual knowledge of the impending end of life of SEP prior to 7 December 2020. [7]
9. Galilee alleges that its end-user devices ceased to be protected by SEP or any equivalent anti-virus software from 7 December 2020 until 7pm on 15 December 2020 when Ethan activated software known as Cisco AMP on Galilee's devices. [8]

Applicable principles

1. Galilee contends that Ethan's alleged breach of the Order constitutes a civil contempt of court.
2. There was no dispute about the elements of a civil contempt charge based on a failure to comply with a court order. Those elements were recently summarised by Adams J in Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2019] NSWSC 193 at [38]: [9] "(i) an order was made by a court; (ii) the order was sufficiently clear such that one can be sure beyond reasonable doubt that the order was not complied with; (iii) the order was served on the alleged contemnor or that service was for some reason dispensed with under some lawful order; (iv) the alleged contemnor had knowledge of the terms of the order; (v) the alleged contemnor breached the order; and (vi) the alleged contemnor took a deliberate step which, even if not intended to, breached the order. What is necessary is not that the alleged contemnor intended to breach the order but rather that the order was breached and that the action constituting the breach was intended. Hence, casual, accidental or unintentional acts which breach an order are excluded."
3. The present case turns on element (v) and, if breach of the order is established, element (vi).
4. It is common ground that consideration of element (v) must begin with the proper construction of the order, and that this is a question of law rather than a matter of fact. As Ethan submitted, it is necessary to determine what the order requires and whether it is "so expressed that the person affected knows, or plainly should know, what he or she is required to do or refrain from doing". [10]
5. That is an exercise in construing the language in the orders as a whole. The Court does not delve into the subjective intentions of the judge pronouncing the order or the parties who formulated the terms of an order made by consent. [11]
6. Both parties submitted that it is permissible in construing a consent order to have regard to the context and surrounding circumstances in which the order was made by consent, applying essentially the same approach as that which applies to the construction of a contract. [12] It is therefore not necessary for me to enter into the debate concerning whether ambiguity is required before resort may be had to surrounding circumstances in construing a court order that was not made by consent. [13] Galilee emphasises that the relevant context includes "elements of applicable law". [14]
7. In relation to element (vi), conduct that is in breach of a court order will constitute wilful disobedience of the order, and therefore a civil contempt, unless the conduct is casual, accidental or unintentional. [15] It is not necessary to show that the alleged contemnor intended to disobey the order or understood the true meaning of the order or understood that their alleged conduct constituted a breach of the order. It is sufficient that the alleged contemnor should have known what he or she was required by the order to do (or refrain from doing). [16]
8. Galilee submitted that a party can be guilty of civil contempt where the breach of the order has been brought about by "the party's own neglect of steps necessary to prevent the breach" [17] or failure to take "adequate and continuing steps" or "all possible steps" to comply with the order. [18] I accept that such neglect or failure, if it results in a breach of the order, may be capable of being characterised as deliberate (in the sense of not being casual, accidental or unintentional) and therefore constituting contempt of court. However, whether such neglect or failure is capable of constituting a breach of the order depends on the terms of the particular order.
9. Both parties submitted that the facts in issue in a civil contempt charge must be proven beyond reasonable doubt. That is consistent with the overwhelming weight of authority. [19]

The proper construction of the Order

1. The principal dispute between the parties concerning the proper construction of the Order is the meaning of the word "intentionally" in the phrase "intentionally ceasing to provide all managed services which the defendant is contractually obliged to provide to the plaintiff as at the date of this order".
2. As Ethan submitted, the ordinary meaning of "intentionally" in the context of an outcome or result concerns the actual, subjective state of mind of the person whose act or omission caused the outcome or result. The requisite state of mind is that the person meant to produce that outcome or result, and that their purpose in committing the relevant act or omission was to bring about that outcome or result. [20] In other words, to adopt the language of senior counsel for Galilee, the act or omission was "calculated and by design" to produce the outcome or result. [21]
3. For the following reasons, I accept Ethan's submissions that the circumstances in which the Order was made, considered objectively, support the word "intentionally" being construed in accordance with its ordinary meaning.
4. Applying the principles summarised above, the surrounding circumstances relevant to the construction of the Order include the nature of the proceedings as revealed by the pleadings, the nature of the harm apprehended by Galilee underlying its application for interim injunctive relief that resulted in the Order being made by consent and the fact that the Contract remained on foot. As the Order is expressly framed by reference to Ethan's contractual obligations to provide managed services, the terms of the Contract are also relevant to the construction of the Order, in my opinion.
5. Pursuant to clause 1.1 of the "Business Services Agreement - General Terms" within the Contract (the Terms), Ethan agrees to supply and Galilee agrees to acquire Services. Galilee is referred to as "the Customer". The Terms define the "Services" as individual services ordered in Service Order Forms.
6. The Service Order Form dated 24 May 2017 is for specified Managed Services, including the provision of anti-virus desktop support for 140 desktops. The Service Order Form states that "Schedule 5 - Managed Services" applies to the provision of those services. Schedule 5 describes the anti-virus support in the following terms: "Management of supported antivirus software central console (including support of basic AV policies, ensuring the services are running, pattern files are regularly downloaded for distribution to AV clients) Management of supported antivirus server agents (including ensuring the services are running and pattern files are regularly downloaded from the central console and applied) Outbreak incident management"
7. Clause 3.2 of the Terms requires Ethan to supply each Service with reasonable care and skill.
8. Clause 3.6 of the Terms provides: "If the Business Services Agreement sets out Service Levels for a Service then Ethan Group will use reasonable endeavours to supply that Service in accordance with those Service Levels. Ethan Group's liability to the Customer for a failure to meet a Service Level is as set out in the Business Services Agreement, failing which, Ethan Group will not be liable (whether in contract, tort (including negligence), statute or otherwise) for such failure. If the Business Services Agreement sets out a remedy for such failure, that is the Customer's only remedy for the failure to meet the Service Levels."
9. The "Service Levels" are defined as any applicable Service Levels for a Service specified in the Service Level Schedule.
10. Clause 3.7 of the Terms provides: "Ethan Group: (a) does not represent, warrant or guarantee that any Service will be free of interruptions, delays, faults or errors; and (b) except as expressly provided in the Business Services Agreement for the relevant Service, is not liable (whether in contract, tort (including negligence), statute or otherwise) to the Customer or any other third party for any interruptions, delays, faults or errors in connection with the supply of a Service (in part or in full) for any reason whatsoever."
11. Clause 6.1 of the Terms provides that Ethan Group, or its licensor, remains the owner of any Software provided to the Customer for use in connection with the Services. Clause 6.3 of the Terms provides: "The Customer acknowledges and agrees that the availability of Software (including any Upgraded Software) may be dependent on its availability from any licensor of the Software and Ethan Group is not liable to the Customer or any other person for any delay or any failure of Ethan Group to obtain any Software from its licensor."
12. I have described the nature of the proceedings and the relief sought at [6]-[9] above.
13. Galilee commenced the proceedings urgently on 7 August 2020 and obtained orders for short service. In its notice of motion for the short service orders, Galilee also sought an interim injunction restraining Ethan from "terminating, suspending or otherwise ceasing or failing to provide all services provided by the defendant to the plaintiff at the date of this order."
14. The application for the injunction was supported by an affidavit of Galilee's principal solicitor and director, Mr Cordell James Smith, sworn on 7 August 2020. Mr Smith deposed to the dispute that had developed between Galilee and Ethan concerning fees charged by Ethan. Exhibited to Mr Smith's affidavit was a letter of demand issued by Ethan to Galilee and dated 29 July 2020, in which Ethan demanded payment of the amount of $504,494.34 allegedly outstanding by 5pm on 28 August 2020 and reserved its rights to suspend or terminate the services being provided to Galilee pursuant to the Contract without further notice pursuant to clauses 3.8(g) or 16.2(a)(3)(A) of the Terms and/or to commence proceedings to recover the outstanding charges. Galilee disputed that it owed the fees demanded by Ethan. Mr Smith deposed to the harm that he considered Galilee would suffer if Ethan were to terminate the Services, including inability to provide continuity of service to its major institutional lending clients, inability to settle mortgage transactions and loss of its business. Plainly, that apprehended harm was the basis for Galilee's application for an interim injunction in the terms set out in its notice of motion filed on 7 August 2020. [22]
15. On 7 August 2020, Galilee's application for the interim injunction was stood over to 14 August 2020. On that date, the application was further stood over to 21 August 2020 by consent. Ethan gave an undertaking, without admissions, that it would not "suspend or terminate or intentionally fail to provide the contracted services it is providing to the plaintiff as at the date of this order". The undertaking was expressed to apply up to 5pm on 25 August 2020.
16. On 20 August 2020, the Order that is now the subject of the contempt charges was made by consent and without admissions. The terms of the order are set out at [10]-[14] above. It will be recalled that the Order restrained Ethan "from suspending, terminating or otherwise intentionally ceasing to provide all managed services which the defendant is contractually obliged to provide to the plaintiff as at the date of this order (Services), pending further order".
17. In my opinion, a reasonable person in the parties' position with knowledge of the circumstances referred to at [36]-[46] above would understand the word "intentionally" in that context to mean deliberately taking steps, or deliberately omitting to take steps, meaning to and for purpose of ceasing to provide all, or at least a substantial part of, the managed services under the Contract. That is to say, a reasonable person would understand "intentionally" in the context of the Order to have its ordinary meaning.
18. Galilee submitted that "intentionally" in the context of the Order refers to a cessation of contracted managed services that is "not unintentional", including any "conscious" act or omission that results in a cessation of all or a substantial part of those services. In support of that submission, Galilee relied on a statement by Hodgson JA in Athens v Randwick City Council to the effect that the surrounding circumstances that may be taken into account in construing a court order include elements of applicable law. [23] Galilee submitted that the elements of applicable law to which the Court should have regard in construing the Order are the principles of the law of contempt. It was submitted that, because contempt will be found if the breach of an order was "not unintentional", the word "intentionally" in the Order should be construed as meaning "not unintentionally".
19. I reject that submission. With respect, the submission confuses elements (v) and (vi) referred to at [25] above. As referred to at [30] above, it is only if an order is breached that it becomes necessary to consider whether the breach was wilful, as opposed casual, accidental or unintentional. It does not follow that the question of breach in relation to an order restraining a party from intentionally bringing about a specified outcome or result can be reframed as a question whether the party has "not unintentionally" caused that outcome through some neglect or failure to take steps reasonably open to it to ensure that the outcome does not occur.
20. In my opinion the legal principles that form part of the surrounding circumstances in this case are the principles governing the grant of interim injunctions. Those principles are designed to maintain the status quo between parties to proceedings in circumstances where it is appropriate to do so in order to avoid irreparable harm that the plaintiff would otherwise suffer if the defendant were to engage in the restrained conduct before the plaintiff's claims are determined on their merits.
21. That aspect of the surrounding circumstances provides further support for construing "intentionally" in the Order consistently with its ordinary meaning, in my opinion. A reasonable person in the position of the parties would not have understood an order restraining Ethan from "intentionally ceasing to provide all managed services" that it is "contractually obliged" to provide as requiring Ethan to take steps to ensure that it did not unintentionally cease to provide those managed services. The reasonable person would have understood that Ethan's obligations to provide the services, and the steps that it was required to take for that purpose, were governed by the ongoing Contract. The reasonable person would have understood the Order as imposing a further obligation on Ethan to refrain from deliberately taking steps, or deliberately omitting to take steps, meaning to and for purpose of ceasing to provide such services.
22. Galilee also submitted that, in framing terms of the Order, the parties "cannot have had in mind that Ethan should be entitled to approach the Order on the basis that it was free to refrain from putting in place any safeguards of a kind which would be likely to prevent the cessation of provision of a substantial part of the contract services (or indeed any safeguards at all), despite the fact that that gave rise to a clear and foreseeable risk of breach of the Order." Thus, it was submitted that the Order "is to be construed as covering any cessation of provision of contracted services over which Ethan had some influence or control, even if the cessation originated in the conduct of a third party."
23. I reject that submission for two reasons. First, it is inconsistent with the ordinary meaning of "intentionally". Knowledge or foresight of a risk of the relevant outcome is not the same as acting with the subjective purpose of bringing about that outcome. [24] Second, it is not the case that construing "intentionally" in accordance with its ordinary meaning would leave Ethan "free to refrain from putting in place any safeguards of a kind which would be likely to prevent the cessation of provision of a substantial part of the contract services". As I have referred to above, Ethan had contractual obligations to continue providing the services. Any failure to do so short of an intentional cessation of the services may (depending on all the circumstances) be a breach of the Contract, but it would not be a breach of the Order in my opinion.
24. Contrary to Galilee's submission, the construction of the Order at [49] above does not produce an "absurd outcome" and is not "irrational". That construction protects Galilee against Ethan's intention stated in its letter of demand to deliberately cease providing services due to non-payment of the disputed fees. As explained at [46] above, that was the very harm that was the basis of Galilee's application for an interim injunction.
25. Galilee's submissions relied on Lade & Co Pty Ltd v Black. [25] In that case, the appellant (a farmer) had given an undertaking to the court to prevent cattle from straying from his land onto neighbouring lands. The appellant had knowledge of circumstances that would lead to the cattle on his land straying onto neighbouring lands, failed to take steps available to him that would have prevented that, and the cattle did then stray. Keane JA held that the appellant's failure to take the available steps that would have prevented the cattle from straying was intentional and was a breach of the unqualified undertaking to prevent the cattle from straying. [26]
26. Galilee places particular reliance on the following passage from the judgment of Keane JA: [27] "In my respectful opinion, if a party can be guilty of contempt by reason of disobedience of an undertaking due to the carelessness or neglect of an employee, then, a fortiori, a party is guilty of contempt where the breach of the order has been brought about by the party's own neglect of steps necessary to prevent the breach. There must, of course, be actual disobedience. There cannot be disobedience if the alleged contemnor does not know of the order which he or she is alleged to have breached. Nor could there be disobedience where the breach of the order occurs by reason of circumstances outside the control of the alleged contemnor. But if the facts of the case enable one fairly to conclude that the alleged contemnor has disobeyed the order or undertaking then that is sufficient to constitute a contempt. The question under the general law then was whether the circumstances of the disobedience were such as to warrant an order in the nature of a punishment as opposed to a vindication of the rights of the other party to the litigation."
27. Contrary to Galilee's submissions, that passage provides no support for the proposition that carelessness or neglect amounts to breach of an order that restrains a party from intentionally doing or ceasing to do something. The passage is speaking to conduct does constitute a breach a court order, and is directed to whether such a breach constitutes contempt.
28. In any event Lade & Co Pty Ltd v Black is distinguishable from the present case because the contemnor had knowledge of the circumstances that would result in a breach of the undertaking, the terms of which imposed on him an unqualified obligation to prevent cattle straying.
29. Galilee also relied on Australian Competition and Consumer Commission v Hercules Iron Pty Ltd [28] in which the respondent had breached an order restraining him from supplying bunk beds that were non-compliant with specified safety standards. Gordon J considered whether a breach of the order by reason of a failure to implement a means of obeying the order could be casual, accidental or unintentional. Citing Lade & Co Pty Ltd v Black, her Honour said that "as soon as orders are issued the person bound by that order becomes responsible for taking adequate and continuing steps … or all possible steps … to comply with the order. If a person bound by an order fails to take such steps to comply with the order, it cannot be said that the conduct was casual, accidental or unintentional." [29]
30. Contrary to Galilee's submissions, the passage quoted immediately above provides no support for the proposition that a person subject to an order restraining them from "intentionally" doing something is required to take steps to ensure that they do not unknowingly, and without meaning to do so, allow that thing to occur. The steps that a person bound by such an order is required to take are simply to refrain from intentionally doing that which they are restrained from doing intentionally.
31. For all of those reasons, the Order restraining Ethan "from … intentionally ceasing to provide" the contracted managed services restrained it from deliberately taking steps, or deliberately omitting to take steps, meaning to and for purpose of ceasing to provide those services. Contrary to Galilee's submissions, "intentionally" in the context of the Order does not mean "not unintentionally".
32. It will be recalled that the conduct particularised in the Amended Statement of Charge is an alleged failure to take adequate and continuing steps that were reasonably open to Ethan to ensure that its software licensor notifications came to the attention of Ethan's senior officers or employees who could take appropriate steps to ensure that the anti-virus protection managed service provided to Galilee was not undermined. As senior counsel for Galilee confirmed in closing submissions, it is not alleged that any officer or employee of Galilee had actual knowledge that SEP was coming to its end of life. The alleged conduct, if it were proved, would not constitute a breach of the Order, properly construed.
33. Senior counsel for Galilee candidly acknowledged that, if Galilee's construction of the Order were held to be incorrect, the contempt charge must be dismissed. The reasons above concerning the construction of the Order are therefore sufficient to dispose of the contempt motion. It is not necessary to address the evidence concerning whether Ethan failed to take adequate and continuing steps as alleged.

Costs

1. Costs should follow the event. Ethan seeks an order that Galilee pay its costs of the contempt motion, and that those costs be payable forthwith.
2. I accept Ethan's submission that the contempt motion that has now been determined is a discrete aspect of the proceedings. Contrary to Galilee's submissions, the question whether Ethan committed a contempt of court as alleged in the Amended Statement of Charge is quite separate from the allegations of misleading or deceptive conduct and unconscionable conduct and the dispute concerning fees that is the subject of the substantive proceedings. [30]
3. I also accept Ethan's submission that the contempt motion involved unreasonable conduct on the part of Galilee insofar as it involved the second charge that was maintained until the afternoon of the second day of the hearing. By that charge, Galilee alleged that Ethan had committed contempt of court by failing to update a particular server. Contemporaneous correspondence between Mr Simon Duke (a principal solicitor and director of Galilee and the solicitor on the record for Galilee in these proceedings) revealed that Mr Duke instructed Ethan not to upgrade that server without his written instructions to do so, Ethan had sought those instructions after providing advice and recommendations, and Mr Duke had failed to provide those instructions. In those circumstances, it was plainly unreasonable for Galilee to charge Ethan with contempt in respect of its failure to upgrade the server.
4. For those reasons, and having regard to the fact that the proceedings are not yet ready to be listed for final hearing, I am satisfied that it is appropriate to order that Galilee pay Ethan's costs of the contempt motion forthwith. [31]

Conclusion and orders

1. For all of those reasons, I make the following orders: 1. Dismiss the amended notice of motion filed by the plaintiff on 3 March 2021, including the Amended Statement of Charge. 2. Order the plaintiff to pay the defendant's costs of the amended notice of motion referred to in order 1 above, as agreed or assessed. 3. Order that the costs payable by the plaintiff pursuant to order 1 above are payable forthwith. 4. Note that the matter is listed for directions on 1 October 2021.

Endnotes

1. Charge 1 in the Amended Statement of Charge. Charge 2 was withdrawn on the second day of the hearing of the contempt motion.
2. Amended Statement of Charge, paragraph 2(a).
3. Amended Statement of Charge, paragraphs 3(a) and (b).
4. Amended Statement of Charge, paragraph 3(c).
5. Amended Statement of Charge, paragraph 3(c)(v)-(vi).
6. Particulars to paragraph 3(c)(vi) of the Amended Statement of Charge.
7. T137.5-137.25.
8. Amended Statement of Charge, paragraph 3(vi)(N).
9. See also NHB Enterprises Pty Ltd v Corry (No. 7) [2021] NSWSC 741 at [193]-[196] and [208] (Bell P) and the authorities there cited; Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2019] NSWSC 193 at [38] (N Adams J) and the authorities there cited; see also In the matter of Jimmy's Recipe Pty Limited [2020] NSWSC 93 at [70]-[71] (Rees J) and the authorities there cited.
10. Athens v Randwick City Council, supra, at [27] (Hodgson JA, Santow and Tobias JJA agreeing); Ross v Lane Cove Council (2014) 86 NSWLR 34 at [50] and the authorities there cited; Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at [19] (Branson J, Lindgren and Finkelstein JJ agreeing).
11. Katter v Melhem (2015) 90 NSWLR 194 at [63] (Campbell AJA, McColl and Leeming JJA agreeing); Bookarelli Pty Ltd v Katanga Developments Pty Ltd [2017] NSWCA 69 at [40] (Sackville AJA, Macfarlan and Payne JJA agreeing).
12. Kirkpatrick v Kotis (2004) 62 NSWLR 567 at [57]; Athens v Randwick City Council, supra, at [28] (Hodgson JA, Tobias JA agreeing).
13. Athens v Randwick City Council, supra, at [28]-[38] (Hodgson JA), [128]-[140] (Santow JA), [141] (Tobias JA); Universal Music Australia Pty Ltd v Sharman Networks Ltd, supra, at [30] (Branson J, Lindgren and Finkelstein JJ agreeing); Ross v Lane Cove Council, supra, at [29]-[31] (Leeming JA, Meagher JA and Tobias AJA agreeing); Commissioner of Taxation v Sandini Pty Ltd (2018) 263 FCR 240; [2018] FCAFC 44 at [155] (Jagot J, Siopis J agreeing).
14. Athens v Randwick City Council, supra, at [36] (Hodgson JA, Santow and Tobias JJA agreeing)
15. NHB Enterprises Pty Ltd v Corry (No. 7), supra, at [193] (Bell P), and the authorities there referred to, including Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113.
16. Microsoft Corporation v Marks (No. 1) (1996) 69 FCR 117 at 143 (Lindgren J); Anderson v Hassett [2007] NSWSC 1310 at [4]-[8]; Metcash Trading Ltd v Bunn (No. 5) [2009] FCA 16 at [9]; Commonwealth Bank of Australia v Salvato (No. 4) [2013] NSWSC 321 at [127]-[129]; In the matter of Jimmy's Recipe Pty Ltd [2020] NSWSC 93 at [70]-[71].
17. Citing Lade & Co Pty Ltd v Black (2006) 2 Qd R 531; [2006] QCA 294 at [63] (Keane JA).
18. Citing Australian Competition and Consumer Commission v Hercules Iron Pty Ltd [2008] FCA 1182 at [8] (Gordon J).
19. See NHB Enterprises Pty Ltd v Corry (No. 7), supra, at [195]-[196] (Bell P), and the authorities there referred to.
20. SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at [27] (Kiefel CJ, Nettle and Gordon JJ) and [67]-[68] (Edelman J).
21. T129.45-129.50.
22. Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [12].
23. Supra, at [36].
24. SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at [27] (Kiefel CJ, Nettle and Gordon JJ).
25. (2006) 2 Qd R 531; [2006] QCA 294.
26. Ibid at [29] and [87] per Keane JA.
27. Ibid at [63].
28. [2008] FCA 1182.
29. Ibid at [8].
30. See [7]-[9] above.
31. See Baller Industries Pty Ltd v Mero Mero Leasing Pty Ltd [2019] NSWSC 1067 at [23] and the authorities there cited.

Amendments 26 August 2021 - Typographical errors DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 26 August 2021